Dropshipping and affiliate marketing are the only two options that online entrepreneurs have for promoting their business and building brand awareness. While dropshipping involves the manufacturer shipping the items from the inventory on your behalf once you set your price, affiliate marketing consists of the merchant who fulfills the order and gets a commission.
Both these marketing options differ from each other, but they have some similarities. They are low-risk, high-earning models that do not require inventory or shipping. The skills needed for both are almost the same, such as posting ads and using social media.
However, by knowing the differences between the two, it becomes easier to find which one of the two is ideal for your business or its goals. Let’s explore the significant differences between the two.
Regarding Risk Level
While analyzing dropshipping vs. affiliate marketing, the former seems to be less risky. While both models are low-risk carriers, dropshipping has a lower risk because your funds are accessible each week.
In the case of affiliate marketing, you may have to come across limits or milestones to reach before take the first bulk of cash via your first cheque. For instance, only a gift card or cheque works for a European Amazon affiliate. However, it is essential to reach a minimum amount to get that cheque. Well, not all can easily reach up to that threshold.
One of the selling points of dropshipping is higher margins than affiliate marketing. For those who want to make money, this is perhaps a plus point. In dropshipping, you can purchase an item by paying $2 and sell the same for $15.99, which still leaves a substantial profit after deducting the expenses.
On the other hand, the affiliate commissions are likely to be low in comparison. Here, the commission is some percentage of actual item cost. Still, after you deduct the marketing expenses, the profit left is a smaller percentage.
In Terms of Asset Building
If you are looking to build your brand and other assets, dropshipping is likely to be a better option. When you are into dropshipping, you give way to build your several assets. First, there is your website.
Second, you can earn well enough to invest in advertising and content to generate traffic for your products or services. Such traffic can quickly increase your sales and revenue, as organic traffic takes time in doing so.
In the near future, you can easily sell your business and move to some other niche. On the other hand, it is uncommon for affiliates to have such assets.
In Terms of Customer Support
This is one critical area where affiliate marketing wins. Here, there is no need to bother for customer support. As an affiliate, you supply leads to the vendor without actually being a product expert. Thus, it is the vendor who deals with the customer and thereby looks after any customer support issue.
In case of any dispute of dissatisfaction, the vendor gives the refund. If some assistance is required, the vendor only takes up the responsibility of providing it. So, for any customer support, you just need to direct customers to the vendor.
On the other hand, in dropshipping, it is you who handle customers and provide them with the necessary support. This is perhaps a significant con of dropshipping as an owner.
However, as a solution to overcome this limitation, it is possible to outsource the service of customer support to a specialist whose charges are affordable. This is how you can focus on marketing and optimization.
You only have to give the desired guidelines and some responses to provide to the customers in case of general queries or issues. Rest, the specialist will take care as a representative.
If you are looking for a business to be an affiliate of, we do have an attractive affiliate program ourselves. You can sign up here.